Francis, Philip L.
Francis, Philip L.
Philip L. Francis
President and Chief Executive Officer of PetSmart
Born in 1946, in Illinois; son of a farmer and a librarian; married Juanita Francis, c. 1971; children: four. Education: University of Illinois, B.A. (agriculture), 1968; Indiana University's Kelley School of Business, M.B.A., 1971.
Addresses: Contact—PetSmart, Inc., 19601 North 27th Ave., Phoenix, AZ 85027. Home—Paradise Valley, Arizona.
Began career at Eisner Food Stores, 1971; joined Jewel Food Stores, early 1980s; chief operating officer, Cardinal Foods (now Cardinal Health), 1985–1988; corporate vice president of wholesale, Roundy's Inc., 1988–1991; chief operating officer, then president and chief executive officer, Shaw's Supermarkets, 1991–1998; president and CEO, PetSmart, Inc., 1998–.
Member: United Way, PetSmart Charities, Luv-A-Pet Adoption Center.
Awards: Illinois 4-H Alumni Award, 2001; Executive of the Year, Arizona State University's W.P. Carey School of Business Dean's Council of 100, 2003.
When retail executive Philip L. Francis took over as chief executive of PetSmart in 1998, he inherited a business plagued with problems. In 1997, the pet-supply company experienced serious financial difficulties. Over the course of the year, its stock prices dipped to $6 a share and sales stood at a stagnant $1.8 billion. Hoping for a turnaround, Pet-Smart turned to Francis and over the course of the next decade, he boosted stock prices and customer appeal by revamping the business model. When Francis took over, the company operated more than 400 stores across North America that did nothing more than sell pet food and pet supplies. Francis decided to branch out and make PetSmart more than just a product-peddling business. He added services—such as grooming, boarding, and on-site vet care—to steer more customers into the stores. The plan—to provide total lifetime care to pets—has been working. In fiscal 2006, sales hit $4.2 billion and by mid-2007, stock prices stood at a steady $34 a share.
It is not surprising that Francis feels at ease in the animal industry. Born in 1946, he grew up alongside three brothers on a rural family farm near Wilmington, Illinois. His father raised Angus cattle while his mother worked as a high school librarian. As a child, Francis filled his free time pursuing 4-H activities. In 1956, he joined the Wesley 4-H Hustlers club in Will County, Illinois, and remained active with the club for nine years. During that time, Francis participated in projects involving cattle, swine, sheep, and chickens. At 15, Francis won a 4-H county speaking contest and two years later he won a national demonstration contest. The contests took Francis to Chicago and Washington, D.C. As an adolescent, Francis also worked as a livestock judge and was club president.
As a teenager, Francis was more interested in agriculture than animals. He dreamed of working at the United Nations as an agricultural attaché. Francis studied economics and statistics through the agriculture school at the University of Illinois. While there, he joined the agriculture fraternity Alpha Gamma Rho and also took an interest in retail after working an internship at the Jewel supermarket chain. After graduating with his bachelor's degree in 1968, Francis decided to do graduate work.
He earned his MBA from Indiana University in 1971 and took a job with Eisner Food Stores in Champaign, Illinois. In the early 1980s, he was lured to Melrose Park, Illinois, to join Jewel Food Stores. By 1985, Francis had relocated to Columbus, Ohio, to work as the chief operating officer of Cardinal Foods—now Cardinal Health. By 1988, he was corporate vice president of wholesale for the wholesale grocery distributor Roundy's Inc. He left that position in 1991 to become the chief operating officer of Shaw's Supermarkets in Norwell, Massachusetts, and in time was promoted to president and chief executive officer. He joined PetSmart in 1998 as president and chief executive officer.
Francis faced a huge challenge when he took over the Phoenix-based pet company. Both stockholders and customers were frustrated with PetSmart. During 1997, inventory problems angered loyal customers and as a result, stock prices plummeted from $23 a share at the beginning of the fiscal year to $6 at the end of the year. Instead of trying to simply fix the immediate problems, Francis looked long-term and tried to find a way to make the company viable and competitive into the future. Under his direction, PetSmart developed a new business plan that included offering services for pets and pet owners. He replaced top-tier management, reorganized the product-delivery system, and improved the staff. Francis discussed the company's reversal of fortune in an interview with Lou Dobbs Moneyline. "We are writing the book on taking what was a product-driven business model—pet food and supplies—and adding on top of that, or into it, services."
The new business model includes providing for the lifetime needs of pets and their owners instead of just offering tons of products at competitive prices. PetSmart stores added grooming, training, pet boarding, and on-site vet care. Over the next several years, the services end of the business grew at a rate of more than 20 percent a year. In 2003, PetSmart trained 250,000 dogs and bathed or groomed 4.4 million dogs. The revenue on sales allowed the company to pay its first stock dividend.
One cutting-edge feature includes the company's PetHotels, which are overnight boarding and day-care facilities for cats and dogs that are much more posh than the average kennel. There's no chain-link fence here. Instead, dogs can stay in suites, complete with a cot and animal-themed television shows. There is also dog-safe ice cream.
PetSmart stores do not sell pets. Instead, each store has a pet-adoption center run by local rescue organizations. "We're not selling dogs and cats because there are too many, and we do not want to add to that problem," Francis told Lou Dobbs Moneyline. "But we are saving a life and creating a customer at the same time." On average, 1,000 pets are adopted each day through the company's many stores. PetSmart also donates money to animal charities.
PetSmart board member Marcia Meyer credits Francis for the company's turnaround. "Phil has a sense about him that is what I call confident optimism," Meyer told the Business Journal's Tara Teichgraeber. "When Phil is presented with two choices, both of which are really good choices, he has one phrase he always says, 'I'll take both, please.' And he figures out a way to get them both done." As the company's fortunes continue to grow, Francis hopes to make revenues climb even higher by opening more stores. His goal: 1,400 stores in North America by 2010.
While Francis likes pets—he has two parakeets, Hootie and Billy, and a terrier mix named Bit O' Honey—it is retail itself that keeps him motivated. "I think retail is fascinating," he told the Business Journal's Teichgraeber. "It's complex, fast-moving and a never-ending job. It's also full of people like I grew up with—honest, hardworking, and reliable. It's a shared risk and reward that's always felt comfortable to me."
Arizona Republic, August 25, 2005.
Business Journal (Phoenix, AZ), April 27, 2001, p. 21B.
Wall Street Journal, October 8, 2006, p. 2.
"Biography: Philip L. Francis," PetSmart, http://phx.corporate-ir.net/phoenix.zhtml?c=93506&p=irol-govBio&ID=148184 (April 23, 2007).
"Company Overview," PetSmart, http://phx.corporate-ir.net/phoenix.zhtml?c=93506&p=irolcompan yOverview (April 23, 2007).
"Phil Francis Has the Smarts about Pets," Kelley Magazine, http://www.kelley.iu.edu/KSB_Global/News/KelleyMagazine/_resources/_pdf/Winter%202006.pdf (April 24, 2007).
"2001 Illinois 4-H Alumni Awards," 4-H, http://www.4-h.uiuc.edu/events/4hday01alum.html (April 25, 2007).
"CEO of the Week," Lou Dobbs Moneyline, June 13, 2003. Video clip available at http://money.cnn.com/2003/06/13/news/ceos/petsmart/index.htm.